Unity Infraprojects Ltd. (UNITY) - Auditors Report

Company auditors report

To the Members of Unity Infraprojects Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of UnityInfraprojects Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss(including other comprehensive income)Cash Flow Statement and the statement of changes in equity for the year then ended and asummary of significant accounting policies and other explanatory information(herein afterreferred to as "standalone Ind As financial statements")

Management's Responsibility for the Standalone Ind AS financial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comphrehensive incom cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards(Ind AS) specifiedunder section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion

a. We invite attention to Note 14 relating to loans repayable on demand from otherparties under which loans & advances taken from six parties as at March 31 2017amounting to Rs. 1490.98 Lakhs is deemed as public deposit in terms of Section 73 of theCompanies Act 2013 which amounts to violation of the same under the Act;

b. We invite attention to Note 4 relating to loans & advances given to four relatedparties covered under section 185 of the Companies Act 2013 under which loans &advances given to four parties during the year after 1 April 2016 amounting to Rs.100.98Lakhs is in violation of the section 185 of the Companies Act 2013;

c. We invite attention to Note 14 relating to non current borrowings which includesborrowings from four banks having balance as per books Rs. 53149.80 Lakhs for which nostatement or confirmation is available. Consequent to which we are unable to determine thefinancial position of the said bank balances and financial impact on loss could not beascertained as it has not been quantified; and

d. We invite attention to Note 8 relating to other bank balances under which fixeddeposits held with 3 banks amounting to Rs.230.05 Lakhs as on 31st March 2017 was notverified by us as it was not provided by the management of the company. Consequent towhich we are unable to determine the financial position of the said bank balances andfinancial impact on loss could not be ascertained as it has not been quantified.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs of the Company as at 31st March 2017 and its loss (including othercomprehensive Income) its cash flows and the changes in equity for the year ended on thatdate.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone Ind ASfinancial statements:

Note 45 to the standalone Ind AS financial statements which indicates that the Companyhas accumulated losses and its net worth has been substantially eroded currentliabilities are more than current assets and the Company has incurred a net cash lossduring the current and previous year. These conditions along with other matters set forthin the Note 55 cast doubt about the Company's ability to continue as a going concern.However standalone the Ind AS financial statements of the Company have been prepared on agoing concern basis for the reasons stated in the said Note; and

Note 4 related to loans to related Parties which indicates that the Company has givenadvances to 12 related parties amounting to Rs. 6555.90 Lakhs whose networth was negativeas on 31st March 2017. Management has given the representation that the said advances arerecoverable.

Our opinion is not modified in respect of these matters.

Other Matter

The standalone Ind AS financial statements include the financial statements of 12 jointoperations which have been audited by other auditors whose reports has been furnished tous and our opinion insofar as it relates to the amounts in respect of joint operations

is based solely on reports of the other auditors. the amount of assets gross revenueof the joint ventures to the extent to which they are reflected in the standalone Ind ASfinancial statements are Rs. 23992.29 Lakhs and Rs.7552.53 Lakhs respectively.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure "I" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2 As required by section 143(3) of the Act we report that:

a we have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purpose of our audit;

b in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c the Balance Sheet the Statement of Profit and Loss and the Cash FlowStatementstatement of changes in equity dealt with by this Report are in agreement withthe books of account;

e The matter described in the Basis for Qualified Opinion paragraph and under theEmphasis of Matters paragraph above in our opinion may have an adverse effect on thefunctioning of the Company;

f on the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act;

g With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure II"; and

h With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Note 37 to the standalone Ind ASfinancial statements;

ii. the Company did not have any longterm contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv the Company has provided requisite disclosures in its standalone Ind As financialstatements as to the holdings as well as dealings in Specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016 are in accordance with the books ofaccounts maintained by the company - Refer Note 49 to the standalone Ind AS financialstatements.

For C. B. Chhajed & Co.

Chartered Accountants

(Firm's Regn. No. 101796 W)

C. B. Chhajed

Place : Mumbai

(Partner)

Dated : 15.05.2017

Membership No : 009447

ANNEXURE "I" TO THE INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 1 of "Report on other legal and regulatoryrequirements" of our report of even date]

TO THE MEMBERS OF UNITY INFRAPROJECTS LIMITED

('the 'Company')

1 a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. The fixed assets of the Company have been physically verified by the managementduring the year and no material discrepancies between the book records and the physicalinventory have been noticed. In our opinionthe frequency of verification is reasonable.

c. In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties are held in the name of the company except in case of'Flat at Taloja' carrying value of Rs. 3.91 Lakhs whose title deed is held in the name ofMr. Ramchandran director of one group company.

2 The inventory (excluding stocks with third parties) has been physically verified bythe management during the year. In respect of inventory lying with third parties thesehave substantially been confirmed by them. In our opinion the frequency of verificationis reasonable. No discrepancies were noticed on physical verification of inventory.

3 According to the information and explanations given to us the Company has grantedsecured / unsecured loans to a eight subsidiary companies five associate companies andone partnership firm covered in the register maintained under Section 189 of the Act. Inrespect of aforesaid loans

a In our opinion and according to the information and explanations given to us theterms and conditions of such loans are not prima facie prejudicial to the interest of theCompany.

b The principal amounts are repayable on demand and there is no repayment schedule. Theinterest is payable on demand.

c In respect of the aforesaid loans the same are repayable on demand and therefore thequestion of overdue amounts does not arise. In respect of interest no interest is chargedby the company.

4 In our opinion the company has given loan to four companies in contravention ofSection 185 of the Act. However the company has complied with the provisions of section186 in respect of the loans investments guarantees and securities wherever applicable.

5 In our opinion and according to the information and explanations given to us theCompany has not complied with the directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014 with regard to the amount received from sixparties. which is deemed as public deposit in terms of Section 73 of the Act. According tothe information and explanations given to us no Order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal on the company in respect of the aforesaid deposits.

6 "We have broadly reviewed the books of account maintained by the Company inrespect of products where pursuant to the Rules made by the Central Government of Indiathe maintenance of cost records has been prescribed under sub-section (1) of Section 148of the Act and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained as confirmed by the cost auditor appointed by the company.The cost audit for the financial year 2015-16 has been completed.

We have not however made a detailed examination of the records with a view todetermine whether they are accurate or complete."

7 a) Based on verification of Books of Accounts and other records of the companyexamined by us in our opinion the Company is not regular in depositing undisputedstatutory dues namely provident fund investor education and protection fund employees'state insurance income-tax sales-tax service tax customs duty excise duty cess andother statutory dues as applicable with the appropriate authorities. The Statutory duesoutstanding as on Balance Sheet date for a period of more than six months from the datethey became payable are listed below:

Name of the Statute

Nature of Dues

Amount (Rs. In Lakhs)

Period to which the amount relates

Date of Payment

The Income Tax Act 1961

Tax Deducted at Source

2075.19

F.Y. 2013-14

Not Paid

1012.17

F.Y. 2014-15

Not Paid

620.43

F.Y. 2015-16

Not Paid

168.09

F.Y. 2016-17

Not Paid

Corporate Dividend Tax

120.19

F.Y. 2011-12

Not Paid

24.04

F.Y. 2012-13

Not Paid

Interest on CDT

23.32

F.Y. 2012-13

Not Paid

Interest on CDT

20.11

F.Y. 2014-15

Not Paid

Interest on CDT

14.51

F.Y. 2015-16

Not Paid

Interest on CDT

8.65

F.Y. 2016-17

Not Paid

Interest on TDS

526.57

F.Y. 2014-15

Not Paid

Interest on TDS

718.58

F.Y. 2015-16

Not Paid

Interest on TDS

387.08

F.Y. 2016-17

Not Paid

Employee State Insurance Act

Employer's Contribution

0.60

F.Y. 2015-16

Not Paid

Employees' Contribution

0.20

F.Y. 2015-16

Not Paid

Employer's Contribution

0.22

F.Y. 2016-17

Not Paid

Employees' Contribution

0.16

F.Y. 2016-17

Not Paid

Sales Tax Act

TDS on Works Contract

19.14

F.Y. 2014-15

Not Paid

61.28

F.Y. 2013-14

Not Paid

37.11

F.Y. 2015-16

Not Paid

Provident Fund & Misc Act

Provident Fund - Employer's Contribution

121.53

F.Y. 2015-16

Not Paid

Provident Fund - Employer's Contribution

13.86

F.Y. 2016-17

Not Paid

Provident Fund - Employees' Contribution

21.06

F.Y. 2016-17

Not Paid

GVAT

Value Added Tax

8.05

F.Y. 2014-15

Not Paid

Finance Act 1994

Service Tax

89.52

F.Y. 2014-15

Not Paid

126.82

F.Y. 2015-16

Not Paid

23.47

F.Y. 2016-17

Not Paid

Various Profession Tax Laws

Professional tax

23.81

F.Y. 2013-14

Not Paid

12.61

F.Y. 2014-15

Not Paid

8.48

F.Y. 2015-16

Not Paid

1.14

F.Y. 2016-17

Not Paid

b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income-tax sales-tax service taxcustoms duty excise duty and cess as on Balance Sheet Date which have not been depositedon account of a dispute are as follows -

Name of the Statute

Nature of Dues

Amount (Rs. In Lakhs)

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act1961

Income Tax

47.27

A.Y.2005-06

Income Tax Appellate Tribunal Mumbai

Income Tax Act1961

Income Tax

17.55

A.Y.2006-07

Income Tax Appellate Tribunal Mumbai

Income Tax Act1961

Income Tax

180.11

A.Y.2006-07

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

209.36

A.Y.2007-08

Income Tax Appellate Tribunal Mumbai

Income Tax Act1961

Income Tax

11.99

A.Y.2007-08

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

33.20

A.Y.2008-09

Income Tax Appellate Tribunal Mumbai

Income Tax Act1961

Income Tax

1160.92

A.Y.2008-09

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

327.39

A.Y.2009-10

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

4753.12

A.Y.2010-11

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

3689.33

A.Y.2011-12

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

2916.86

A.Y.2012-13

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

4848.83

A.Y.2013-14

Commissioner of Income Tax Appeal

Income Tax Act1961

Income Tax

1918.20

A.Y.2014-15

Commissioner of Income Tax Appeal

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

162.22

A.Y.2006-07

Joint Commissioner of Sales Tax (Appeal - VI)

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

1.90

AY 2007-08

Joint Commissioner of Sales Tax (Appeal - VI)

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

4301.22

A.Y.2009-10

Joint Commissioner of Sales Tax (Appeal - VI)

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

8.94

AY2010-11

Joint Commissioner of Sales Tax (Appeal - VI)

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

123.25

A.Y.2011-12

Joint Commissioner of Sales Tax (Appeal - VI)

Maharashtra Value Added Tax Act 2002

Maharashtra Value Added Tax

157.19

A.Y.2007-08

Joint Commissioner of Sales Tax (Appeal - VI)

Madhya Pradesh Value Added Tax Act 2002

Madhya Pradesh Value Added Tax

323.57

A.Y.2013-14

Commissioner of Sales Tax

Central Excise Act 1944

Excise

9.09

F.Y. 2012-13

Appellate Tribunal Cestat

Central Excise Act 1944

Excise

30.42

F.Y. 2013-14

Appellate Tribunal Cestat

Central Excise Act 1944

Excise

8.36

F.Y. 2014-15

Appellate Tribunal Cestat

Finance Act 1994

Service Tax

56015.21

F.Y. 2010-11 to F.Y. 2014-15

Adjudication Cell Principal Commissioner Service Tax -III

Finance Act 1994

Service Tax

31.52

F.Y. 2009-12

Commissioner of Central Excise Appeals

Finance Act 1994

Service Tax

10.37

F.Y. 2012-14

Commissioner of Central Excise Appeals

Finance Act 1994

Service Tax

4.89

F.Y. 2014-16

Commissioner of Central Excise Appeals

8 According to the records of the Company examined by us and the information andexplanation given to us the Company has not paid installment including interest thereonto financial institutions and banks since amount payable has been converted into WorkingCapital Term Loan Funded Interest Term Loan and equity shares as per the CDR Scheme withCDR Lenders. However the amount payable during the year as per the CDR Scheme has not beenpaid by the company. Details of the said default is as follows :

Name of Lender

Amount of Default

Period of Default

Abhyudaya Bank

275.72

30th April 2016 to 31st March 2017

Allahabad Bank

633.63

30th April 2016 to 31st March 2017

Axis Bank

104.03

30th April 2016 to 31st March 2017

Bank of Baroda

190.34

30th April 2016 to 31st March 2017

Bank of Maharashtra

370.50

30th April 2016 to 31st March 2017

Catholic Syrian Bank

124.82

30th April 2016 to 31st March 2017

Central Bank Of India

1003.73

30th April 2016 to 31st March 2017

Corporation Bank

239.42

30th April 2016 to 31st March 2017

DBS BANK LTD

50.48

30th April 2016 to 31st March 2017

Dena Bank

172.40

30th April 2016 to 31st March 2017

ICICI Bank

718.02

30th April 2016 to 31st March 2017

IDBI Bank

121.37

30th April 2016 to 31st March 2017

Indian Bank

149.22

30th April 2016 to 31st March 2017

Name of Lender

Amount of Default

Period of Default

Indian Overseas Bank

180.99

30th April 2016 to 31st March 2017

Indusind Bank Ltd

60.22

30th April 2016 to 31st March 2017

Ing Vysya Bank

34.29

30th April 2016 to 31st March 2017

L & T Infrastructure Finance Co. Ltd.

30.73

30th April 2016 to 31st March 2017

Standard Chartered Bank

138.37

30th April 2016 to 31st March 2017

State Bank Of India

404.83

30th April 2016 to 31st March 2017

State Bank Of Mysore

103.86

30th April 2016 to 31st March 2017

State Bank Of Patiala

102.53

30th April 2016 to 31st March 2017

Uco Bank

484.84

30th April 2016 to 31st March 2017

Union Bank Of India

307.97

30th April 2016 to 31st March 2017

Total

6002.36

9 The Company has not raised money by way of initial public offer or further publicoffer or debt instruments. Term loans taken by the company in our opinion and accordingto the information and explanations given to us on an overall basis have been appliedfor the purposes for which they were obtained.

10 During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the management.

11 In our opinion and according to the information and explanations given to us theCompany has not paid or provided any managerial remuneration. Accordingly clause (xi) ofparagraph 3 of the Order is not applicable to the Company.

12 In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly clause (xii) of paragraph 3 of the order isnot applicable to the company.

13 In our opinion and according to the information and explanations given to us thecompany has complied with sections 177 and 188 of the Act in respect of transactionsentered with the related parties during the year. Details of the transactions have beenadequately disclosed in Note 34 of the standalone Ind AS financial statements.

14 According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause (xiv) of paragraph 3 of the order is notapplicable to the company.

15 According to the information and explanations given to us the Company has notentered into any noncash transactions during the year with the directors or personsconnected with directors. Accordingly clause (xv) of paragraph 3 of the order is notapplicable to the company.

16 According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly clause (xvi) of paragraph 3 of the order is not applicable to the company.

For C. B. Chhajed & Co.

Chartered Accountants

(Firm's Regn. No. 101796 W)

Place : Mumbai

C. B. Chhajed

Dated : 15.05.2017

(Partner)

ANNEXURE "II" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF UNITY INFRAPROJECTS LIMITED

We have audited the internal financial controls over financial reporting of UnityInfraprojects Limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit

to obtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matter

Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to 12 joint ventures is based on the corresponding reports of the other auditors.